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Posts on this website are general "tips" and nothing more than that and should never be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. Sparty's posts nearly always relate to companies that he either holds, has held or intends to hold.

Main ForumAura Energy vastly undervalued Uranium company compared with its peers re resources to market cap.

  • Uranium warming up. Best Mkt Cap/Resource opportunity

    October 15th, 2010

    As a long term uranium investor I like to keep a fairly close eye on several factors including the spot price, the long term price, the direction of the global uranium companies share prices as well as the Australian Uranium Share Price Index and the  global uranium fund’s (GURAF) trend.

    Recently we have seen an increase in both the spot and long term uranium price and over the last week a rise in several of the ASX listed uranium plays.

    This lead me to have a look at the market caps and JORC resources of our ASX listed uranium plays.

    I must admit the results surprised me in that one company in a safe, uranium mining friendly country, has a verified resource (291m pounds) almost equal to Paladin’s but a market cap of $19.6 million compared to Paladin’s 2.8 billion. Extract has slightly bigger resource than Paladin’s and a market cap of $1.5 billion. Paladin are mining, Extract probably will be mining in 2011 but that doesn’t really indicate why my “find” is 100 times cheaper. Even more interestingly my “find” has good reason to believe that it will have a resource of around 1 billion pounds of uranium, around 3 times more than Extract current 400m pounds.

    Here is what says about my “find“.

    Aura Energy (ASX: AEE, “Aura”) is a uranium explorer with projects in Australia, Sweden and Africa. The Company has assembled an exceptional portfolio of properties on three continents, including a major presence in Sweden’s Alum Shale Province, one of the largest depositories of uranium in the world. The Company continues to be very active, with drilling completed on all three continents in 2008.
    Aura is a major landholder in the mineralised Alum Shale of central Sweden. The Alum Shale is widely distributed throughout the Baltic States and locally contains exceptionally large resources of uranium, vanadium, molybdenum and nickel.

    Aura’s Storsjon Project adjoins Continental Precious Metals’ (TSX: CZQ) Viken Project, which has a published resource of 1.05 billion pounds U3O8 grading 0.017%. This size of resource makes Viken the second largest published uranium deposit in the world after Olympic Dam.
    Aura’s considers that it holds approximately half of the uranium field, and anticipates defining resources of similar size to Viken in its Storsjon Project.“

    I can hear you thinking it is the grades dummy:  “The resource, using a 100ppm U3O8 cut-off, gives the Häggån Project a contained uranium content of 291 Mlbs. This resource places Häggån seventh within the ten largest undeveloped uranium resources that are compliant with ASX or TSX requirements”

    But from their latest metallurgy results published yesterday (14th/October/2010) Their  tank leach metallurgy seems to be promising… They also  have a massive amount of Vanadium, some Zn, Ni, Mb.

    “The first metallurgical test results for Aura’s Häggån Uranium‐Molybdenum‐Vanadium Project in Sweden gave high uranium recoveries using conventional treatment methods:

    • Conventional acid leaching achieved uranium recoveries of up to 93% from Aura’s samples
    • Majority of uranium extraction was achieved in first 12 hours of leaching”

    AEE are now looking at enhancing the leach process using a biological  model

    “Aura commenced bioleaching testwork with the Parker Cooperative Research Centre for hydrometallurgical research in Perth, Western Australia in late 2009. Bacterial cultures have been established from three sources: the ore; waters from the project area in Sweden; and from a coal mine in Western Australia.

    Initial work demonstrated improved extraction rates of uranium, molybdenum, nickel and zinc using bacteria, relative to samples without bacteria. Consequently these initial results indicate the Alum Shales within the Project are likely to be amenable to bioheap leaching.

    This method of extraction will potentially provide a low capital and operating cost treatment route.
    These preliminary small‐scale tests are encouraging, confirming that bacterially‐assisted leaching of uranium from the mineralisation may be technically feasible.”

    So a very large resource possibly in the world’s top four, a proven tank leach process with a throughput time of around 12 hours and a possible much greater efficiency with a biological modification all for 1/100th of EXT’s current price. WOW!

    I hold AEE

  • And if the above isn't enough Aura Energy has now tied up a very large amount of ground in Mauritania that gives AEE one of the largest land holdings that covers 8,500 sq kilometers of highly prospective ground. (Announced 20-10-2010).

    The initial exploration target of 40 - 60 million pounds U3O8 at around 300- 400ppm will be drilled in early 2011 with a JORC also in 2011. Read the AEE release

    You might also have a look at AEE's substantial Australian holdings
    It appears that AEE is rapidly building a major uranium portfolio that is both geographically distributed and of major proportions in terms of their uranium resources.

  • Sweden's energy is provided by 47% nuclear power, 44% hydroelectric and 9% biofuels. The country is a world leader in nuclear efficiency research and disposal of nuclear waste which occurs in-country. Sweden ranks among the top countries in the world for reliance on nuclear power, as well as for power plant efficiency. The current government recently overturned a 27 year anti-nuclear power policy, and has approved the expansion of some nuclear plants.

    In Sweden, the same legislation is applied to all minerals (including uranium) during the exploration phase. To gain approval for uranium mining, a company must apply to the national government for a ruling. There is no ban on uranium mining in Sweden today and the current government has stated it will review all uranium mining projects in light of the relevant legislation and environmental standards. The municipal government, where the specific project is located, retains a right of veto for uranium mining projects. Sweden's nuclear power plants require 1,500 tonnes of uranium fuel each year, all of which is imported.
    Sweden + uranium mining

  • Becoming loved?

    aee-becoming-loved.gif Up 78% over the last few months... market cap is now $50m, but for a possible 1billion pounds of U3O8 contained is very cheap. See above.

  • Now up 91% since my first post in October... still ultra-cheap in terms of resource size to market cap.

  • aee-projects-1024x674.jpg

  • Aura Energy ASX: AEE up 14% today doubling EXT's 7% rise on the back of EXT's partner in Namibia Kalahari getting a $1.2 billion bid from China.

    Got to wonder who is that hungry... has China kicked into gear... and if so who is next on the plate?

    I hold AEE... you NEED to know what AEE has! Read the posts above.....

  • Aura's Häggån project is amongst the ten largest uranium resources in the world, yet the existing JORC first inferred resource of 291 million pounds of uranium (U3O8) is based on only 5% of the permit area, mainly in the eastern side, highlighting the projects resource upside potential.

    AURA has just completed an 11 hole drilling program and we can probably be sure of a rather large upgrade.... All up the project is thought to have over a billion pounds of uranium... see earlier posts.

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